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March

Service sector data dominates the day

Published: Monday 05 March 2018

  • Aussie data improves but Australian Dollar fails to gain ground
  • Italian election results inconclusive
​​By David Johnson

Positive data fails to ignite Australian Dollar

The Australian Dollar failed to gain ground overnight despite a couple of positive data releases. The number of building approvals shot up by over 17% after a 20.6% drop in December, although private house approvals were down marginally. However, Australian company pre-tax profits were up 19% in the three months to December. That ought to have boosted the AUD, but we will probably get upbeat Australian Retail Sales figures overnight tonight and a no change decision from the Reserve Bank of Australia (RBA). The words the RBA uses will be influential, but events elsewhere are also impacting everything.

Service sector in sharp focus

Not the least of these factors is the US President apparently embarking on a series of trade wars, despite the British Prime Minister’s warning not to do so. However, this afternoon is dominated by US service sector data. The forecasters are looking for a small scale drop in confidence in that sector and the US Dollar, which has had a very strong few days, ought to give up some of its gains if that is the case.

The British version of the service sector survey is due at 09:30 and that is expected to be a tad up on the previous month, but the Pound is more heavily influenced by Brexit talk than anything else at the moment.

The Euro is in fairly stable mode ahead of this morning’s release of Eurozone retail sales data. An annual rise of 2.1% is envisaged and that should boost the Euro somewhat. It is currently slap bang in the middle of its ranges against the Pound and US Dollar.

Effects of Italian election results still to be determined…

The other major factor that will affect the strength of the Euro is the final shape of the new Italian government and just how right wing it is in the end. The recently formed Five Star Movement is in second place after Silvio Berlusconi’s right-wing coalition, so there is a long way to go before any kind of government can emerge.
 
 
Taking the high road

And I have to admit to feeling a little sick seeing Piers Morgan trying to adopt the high moral ground over the Bradley Wiggins and Team Sky news this morning. I think my views are summed up in a Twitter exchange between Morgan and a chap called Colm Quinn in 2012.

Morgan tweeted – ‘and yes I was disappointed @bradWiggins didn’t sing the national anthem either. Show some respect to your Monarch please!’

Colm’s response was – ‘@piersmorgan, I was disappointed when you didn’t go to jail for insider dealing or phone hacking, but you know, each to his own.’ Colm Quinn I salute you.
In honour of the Oscars, jokes from inside the movies

Q:        How many production designers does it take to change a light bulb?
A:         But does it have to be a lightbulb?
 
Q:        How many over-eager personal assistants does it take to change a light bu…
A:         Done!
 
Q:        How many editors does it take to change a lightbulb?
A:         I told you… no more changes!

Today's Major Economic Releases

Market BST Data/Event Previous Expected
EUR 09:00 EU: Final Service Purchasing Managers' Index 56.7 56.7
GBP 09:30 UK: Services Purchasing Managers' Index 53.0 53.3
EUR 09:30 EU: Sentix Investor Confidence 31.9 31.1
EUR 10:00 EU: Retail Sales -1.1% 0.3%
USD 14:45 US: Final Services Purchasing Managers' Index 55.9 55.9
USD 15:00 US: ISM Non-Manufacturing Purchasing Managers' Index 59.9 58.9

For more information, infographics and the latest currency insights, visit www.halofinancial.com/news